City of Pittsburgh admits “mistakes” but no wrongdoing in P-Card case

An investigation by the Office of Municipal Investigations found that payments made by the city's parks and recreation director to a controversial former contractor violated some policies but did not warrant termination or further disciplinary action.

Deputy Mayor Jake Pawlak told reporters Wednesday morning that Parks and Recreation Director Kathryn Vargas violated city personnel and contract procedures when she hired Mario Ashkar to help with the city's farmers markets. He said disciplinary action has already been taken, including a review of the proper use of “P-Cards,” city shopping credit cards used to pay Ashkar. But he said no further action would be taken.

Mayor Ed Gainey's administration “believes that hard-working, exemplary employees who make honest mistakes should learn from those mistakes and have the opportunity to improve,” Pawlak said. “Director Vargas has led her team to do great work serving the citizens of Pittsburgh, and we have every confidence that she will continue that work with the energy, compassion and integrity that she has always put at the heart of her public service.”

The circumstances of Ashkar's work for the city drew attention in the spring after Ashkar, who uses “they”/”them” pronouns, was charged in connection with ethnic intimidation in May on the city's north side. Authorities said surveillance footage showed Ashkar removing an Israeli flag from a north side home and throwing it in the trash. City Controller Rachael Heisler then raised questions about Ashkar's hiring and use of a P-Card for payment.

The announcement of the OMI findings came one day after District Attorney Stephen Zappala's office served a search warrant on the mayor's office demanding the OMI report and investigative file.

News of the search warrant broke Tuesday afternoon, and Pawlak said, “Since we received the warrant yesterday, we wanted to make sure we released this information at the same time.” He added that the investigation into the payments took two months and the mayor's office plans to release its findings later this month, even before the search warrant arrives.

Pawlak said the search warrant was not a big surprise: Zappala had requested the documents before, but the city responded that it could not release the records without a court order.

Zappala has criticized Gainey on a number of issues, particularly during the DA's re-election campaign last year. However, Pawlak said the warrant was related to the Ashkar case and did not request data on P-Card use in general. The city retains about 70 of the credit cards for purchases. Pawlak said no other warrants have been served on the mayor's office.

“We believe that ultimately there is no basis for a criminal investigation,” Pawlak said. “I think this is another example of the prosecution pursuing an issue that has received a lot of media attention.”

Zappala's office did not immediately respond to a request for comment from WESA. But it released a copy of the search warrant, which requested the OMI file on Asharkar “and all investigative files related to the … use of all purchasing cards” between July 2023 and this week.

In the affidavit used to obtain the warrant, an investigator in Zappala's office writes that the office received a USB drive – allegedly from the city treasurer's office – that contained documents related to the payments and Ashkar's work for the city. Due to questions about the payments and reports from other investigations, the affidavit says, the office asked to see the OMI file but was told it would have to request a copy from City Attorney Krysia Kubiak.

Kubiak eventually told investigators that the material was personnel matter and could not be released, although the affidavit claims that “OMI has transferred its files to this office on multiple occasions. [and it is] It is not standard procedure for OMI to require a lawyer’s signature before providing a file.”

The affidavit states that Ashkar “was wrongfully paid” and that “individuals in the City of Pittsburgh are not cooperating with the City Treasurer's Office and the Allegheny County District Attorney's Office.”

“Error in assessment”

OMI concluded that the payments to Ashkar did not violate the city's purchasing card policies, contrary to concerns previously raised by Heisler. The policies prohibit P-Card payments for professional services, but OMI concluded that Ashkar's services did not fall under the definition of “professional” as someone “employed in a profession that requires a high level of training and competence.”

However, OMI found that the contract should have been approved by the City Council because the amount paid in 2023 exceeded the $10,000 limit set by city ordinance. It also said that because of the length of Askar's employment, Vargas should have prepared a formal job description with human resources or other officials for the work.

According to the report, Vargas was aware that Ashkar had previously been fired from his job as a special events coordinator at the Department of Public Safety for poor performance and unexpected absences. But “Director Vargas saw potential” in Ashkar, it said, and Pawlak said Vargas believed Ashkar could help operate the city's farmers market.

The report said there was “no evidence that she had a prior personal relationship,” but it did not discuss whether there were any connections between Ashkar and staff in the mayor's office. Pawlak told reporters that was not the case based on internal discussions.

In a statement, Gainey called Vargas a valuable member of his team.

“I know the passion, compassion and thoughtfulness that Director Kathryn Vargas brings to her job every day,” Gainey said. “I know she regrets her error of judgment and is doing whatever is necessary to ensure her actions and processes are consistent with city policies.”

In an afternoon statement, Heisler said there were “unanswered questions” about Ashkar's work for the city, including “the lack of a written agreement between the parties” about the terms of their work. In a list of “physical evidence” used to compile its findings, OMI cites an email exchange in which Vargas claims to have a contract with Ashkar, but there is no mention of OMI reviewing the contract itself.

The city does not plan to change its P-Card usage policies, but has implemented additional monitoring processes for the cards, Pawlak said.

“We are now able to proactively identify cases where, if we use the same provider multiple times for substantially similar services, we would switch to a different contract type and a different payment method,” he said.

Heisler said hiring Ashkar may also have violated state ethics rules. The state's ethics commission can neither confirm nor deny that an investigation is underway. While the results are made public, they typically take many months to come through, and as of Wednesday, no results had been released.

Bob Charland, a council member who has been outspoken about his concerns about the city's use of P-Cards, said he was “deeply dissatisfied” with the administration's lack of communication with the council about the investigation.

Charland has voted against authorizing any P-Card payments for months. He said he would do so until “additional safeguards are in place.” On Wednesday, he said he would continue to vote no “until the process is corrected.”

“I am skeptical about the administration's ability to manage these P-Cards without making payments to their friends, and I believe a thorough investigation by the District Attorney is a necessary and welcome next step,” he said.

Chris Potter contributed to this report.

This story is evolving and will be updated.